Cornet v. Twitter, Inc.

Background

After Twitter laid off a substantial portion of its workforce in November 2022, Emmanuel Cornet and other plaintiffs sued Twitter on behalf of themselves and a proposed class of Twitter employees. The operative second amended complaint alleged claims for breach of contract, promissory estoppel, violations of the federal Worker Adjustment and Retraining Notification Act, the California WARN Act, and other California Labor Code provisions.

The plaintiffs alleged that employees were third-party beneficiaries of the merger agreement for Elon Musk’s purchase of Twitter. Count II alleged that Twitter breached a merger-agreement commitment to provide terminated employees with severance packages no less favorable than those provided before the acquisition. Counts I and III asserted another contract claim and a promissory-estoppel claim based on promises about employee benefits and severance.

In earlier orders, the court had directed Twitter to give notice about this case before asking employees to release legal claims through severance packages. It had also sent the claims of the named plaintiffs Emmanuel Cornet, Justine De Caires, Grae Kindel, Alexis Camacho, and Jessica Pan to individual arbitration.

Transfer request

Twitter asked to transfer the case to the District of Delaware under 28 U.S.C. § 1404(a), relying on a forum-selection clause in the merger agreement. In the alternative, Twitter asked to dismiss the complaint for improper venue under Federal Rule of Civil Procedure 12(b)(3), or to dismiss certain claims for failure to state a claim under Rule 12(b)(6).

The merger agreement required disputes arising out of or relating to the agreement or the related transactions to be brought in specified Delaware courts, including federal courts sitting in Delaware. It also provided that Delaware law would govern the agreement and related proceedings.

The court explained that a valid forum-selection clause ordinarily receives controlling weight in a transfer decision. When such a clause applies, the court generally considers only public-interest factors rather than private concerns such as witness convenience. The plaintiffs had alleged that they were entitled to benefits under the merger agreement. Because their claims could not be resolved without referring to that agreement, the plaintiffs could not avoid the forum-selection clause by arguing that they were not signatories to it.

Claims covered by the clause

The plaintiffs did not dispute that Count II fell within the forum-selection clause. They argued that Counts I and III were independent of the merger agreement. The court rejected that argument because the complaint alleged that Twitter’s promises about benefits and severance were included in the merger agreement and were also communicated to employees in writing. The court concluded that Counts I through III were logically connected to the merger agreement and therefore fell within the clause.

Dismissal of other claims

Counts IV through VI asserted violations of the federal and California WARN Acts and various California Labor Code provisions. The plaintiffs acknowledged that the named plaintiffs pursuing those claims had been compelled to arbitration. They initially sought to substitute other lead plaintiffs, but later abandoned that request and filed another lawsuit with a new lead plaintiff. The plaintiffs then said Counts IV through VI could be dismissed.

The court dismissed Counts IV through VI without prejudice because none of the remaining named plaintiffs asserted that they had standing to bring those claims. Standing is the requirement that a plaintiff show a sufficient connection to the dispute and a legally recognized injury for each claim.

Disposition

The court concluded that all claims remaining before it were subject to the merger agreement’s forum-selection clause and that the plaintiffs had not identified an exceptional reason to avoid enforcing it. The court transferred the case to the District of Delaware. Counts IV through VI were dismissed without prejudice. The opinion did not separately decide Twitter’s alternative Rule 12(b)(3) and Rule 12(b)(6) requests. It noted that the question whether to decline supplemental jurisdiction over any remaining state claims was better addressed after transfer.